Browne v. King , 111 Tex. 330 ( 1921 )

The suit is a controversy between W.H. Browne and Mrs. H.M. King over an undivided interest of approximately 1044 acres of land in Kleberg County. It was originally instituted by Dimas F. Acebo and Joseph A. Acebo against Mrs. King Later, the Acebos settled the suit by conveying the land to Mrs. King. This was without Browne's knowledge. After this conveyance and while the case continued on the court's docket, Browne intervened, asserting an interest in the land in virtue of a power of attorney given him by the Acebos under which he claims the suit was originally brought.

The Acebos held title under one Domingo Rotge and subject to a mortgage lien upon the land in Mrs. King's favor, given by Rotge to secure certain indebtedness.

During the life of this indebtedness and lien and while the title, under a duly recorded deed, was in Jose Acebo, the father of the Acebos here and through whom they deraign title, Mrs. King instituted a foreclosure suit and obtained a judgment for her debt with foreclosure of her lien. Jose Acebo, the then holder of the title, was not made a party to the foreclosure suit. At the foreclosure sale the land was bought in by the Milmo National Bank of Laredo for $4822.00, an amount sufficient to satisfy the judgment debt. Later, the Bank conveyed the land to Mrs. King for a consideration of $4458.35, paid by her, and she went into possession. Her possession has since continued.

Sometime after these proceedings and after they had acquired the Jose Acebo title, Dimas F., and Joseph A. Acebo gave to Browne the power of attorney which is the basis of his claim to an interest in the land. It was duly of record when Dimas F. and Joseph A. Acebo settled their suit for the land against Mrs. King by their conveyance to her. The power of attorney, among other things, empowered Browne to employ counsel and to sue for this land, and provided that in consideration of his services in effecting its recovery for the Acebos there was granted him one-half of the amount of land so recovered.

The suit of the Acebos against Mrs. King for the land was brought by an attorney employed by Browne. Browne examined the records; furnished the attorneys an abstract of title; went personally upon the land twice; and did such other things for the preparation of the trial as his attorney directed. The suit, however, was wholly in the name of the Acebos. It did not disclose any interest of Browne. Mrs. King in acquiring the title of the Acebos had no notice, so far as the record shows, of Browne's connection with the suit or of anything done by him in relation to it or the land. Her notice of any interest held by him in the land was such only as was afforded by the record of the power of attorney given him by the Acebos.

In the trial court a verdict was directed against Browne. The judgment was affirmed by the Honorable Court of Civil Appeals. Browne, in this Court, makes no complaint of the judgment except as between Mrs. King and himself.

The instrument executed by the Acebos and given Browne was not effective on delivery as a deed to one-half of the land. It conveyed no present interest. His interest was to be a future one. It was to be in the land when "recovered," and then only in consideration of the performance of his part of the contract. Except upon such performance he was to have no interest. Further action on his part was necessary — his recovery of the land for the grantors by the prosecution of a sucessful suit or amicable partition. There was no grant to him of an interest in the land under its existing status. The grant was an interest in the land "so recovered," revealing very plainly that his interest was to be effective only after the successful exercise of his agency. The necessity for future action on Browne's part as the condition for the vestiture of any interest in his favor, made the contract purely executory. Hazlett v. Harwood, 80 Tex. 508; Taylor v. Taul, 88 Tex. 665.

Browne, himself, recognized that the instrument conveyed to him no present interest, for the suit which he caused to be instituted for the recovery of the land, was alone in the name of the Acebos.

While this is true, the instrument was something more than a mere naked power of attorney. It was a contract on the part of the Acebos to convey to Brown the legal title to one-half of the land upon his performance of the agreement. Such performance by Brown would have vested in him an equivalent equitable interest. After the performance of his agreement in part, the Acebos could not, in breach of their contract, defeat Browne's interest by a refusal to permit him to complete the agreement and a sale of the legal title to their adversary. A purchaser of the legal title under such circumstances, with notice of Browne's equity, would take it subject to his rights. The title of the purchaser with notice would be subordinate to Browne's equitable interest if the latter were able to establish that but for the sale he could and would have perfected that interest.

But, at best, Browne's right was only an equity; and if fully perfected by his entire performance of the contract could only have amounted to an equitable interest. If it be admitted that at the time of the sale by the Acebos of the legal title to Mrs. King he had done everything required of him under the contract up to that time, and that but for such sale he would have been able to recover the land, yet, if Mrs. King bought the title without notice of his equity, she would be entitled to protection as an innocent purchaser. Mrs. King had constructive notice of the contract when she purchased the legal title. But the contract of itself conferred no equity. Performance by Browne of the agreement was necessary to the creation of his equitable interest, and therefore to affect the legal title in Mrs. King's hands with his interest it was necessary that he establish that she bought with notice of such performance. There was no proof that she had such notice. According to the record she knew nothing of Browne's relation to the suit of the Acebos or of anything he had done in performance of his contract with them. The record of the contract gave her no such notice, and the suit itself in no way disclosed Browne's connection with it.

Aside from this feature of the case Brown, under his pleading, was not entitled to recover the land. Mrs. King's foreclosure suit and sale did not affect the title of the Acebos, since the then holder of the title was not a party to the suit. But, with the owner of the equity of redemption not a party to the suit, the foreclosure sale operated as an equitable assignment of the mortgage to the purchaser. Bradford v. Knowles, 86 Tex. 505. Equity in such case will treat the mortgage as still in force, and the purchaser at the sale, by subrogation to the rights of the original holder, may in a proceeding with proper parties disregard the first sale and have the premises resold, so that the rights of all parties may be protected and enforced. Silliman v. Gammage, 55 Tex. 365.

Mrs. King on purchasing the land from the purchaser at the foreclosure sale, succeeded to the same right and went into possession of the land under such sale. Her status became that of a mortgagee in possession, and was such at the time of the suit of the Acebos and Browne's intervention in that suit. Neither at the time of the foreclosure sale nor of her purchase and entry was the mortgage lien barred. The Acebos held their title subject to this mortgage. Browne could acquire no better right than they possessed. The Acebos were not entitled to recover the land without paying the mortgage debt, nor was Browne. Mrs. King was a mortgagee in possession, and she could in no event be dispossessed by Browne without payment of such debt. Rodriguez v. Haynes, 76 Tex. 225. Browne in his intervention made no offer to pay the debt, but sought to recover the land wholly without its payment.

In Bradford v. Knowles, 86 Tex. 505, relied on as authority by Browne for his right to recover the land without paying this debt, it was held under the facts there that the junior holder of the legal title to a part of the land, who had not been made a party to the mortgage foreclosure suit, was not in equity obliged to refund the purchase money to those holding under the purchaser at the foreclosure sale as a condition of the right to recover the land. But this was because the mortgage was barred when the foreclosure proceedings were instituted — a fact the holder of the legal title, if a party to the foreclosure suit, would have been entitled to establish; and because, also, he would have had the right to require the other part of the land sold before his part was proceeded against. There is no such condition here. The mortgage here was in full force down to and subsequent to the time Mrs. King bought from the foreclosure purchaser and her entry into possession; and the Acebo title embraced all the land subject to the mortgage.

The judgments are affirmed.

Affirmed.